Regardless of having its stock price battered to the point of triggering a delisting review by the Toronto Stock Exchange, Pure Nickel Inc. has mustered resources sufficient to carry out multimillion-dollar mineral exploration programs at both of its Alaska properties in 2013.

Due to the low share price of the stock, Pure Nickel's market capital fell below the C$3-million-threshold for mining companies listed on the TSX, which triggered the delisting review. Pure Nickel has until early September to meet the TSX market cap requirement. At the current shares outstanding, the explorer's share price must hold at or above C4.5 cents for 30 consecutive days to satisfy the minimum criteria. At June 25, Pure Nickel shares were at C5 cents on the TSX.

Currently, Pure Nickel's market cap barely accounts for the company's roughly C$2.5 million of working capital and gives the company little credit for the US$3.5 million of exploration being funded by its partner, Itochu Corp., at the Man nickel-copper-platinum group element project in Alaska; or the company's portfolio of mineral properties, including the Salt Chuck palladium-gold project in Southeast Alaska.

"The markets aren't a lot of fun," Pure Nickel President David McPherson explained during a May interview with Ted Ohashi of Ticker Talk. "But I like to think that we have been better than most at managing our way through it, not withstanding what the share price is. We are in a strong cash position today - our working capital is just under C$3 million, which compared to my peer group is very strong."

While he may not be able to control the markets, McPherson said he can position Pure Nickel to be ready when investors once again have an appetite for the high-risk, high-reward opportunities that the mineral exploration sector offers.

To that end, Pure Nickel and Itochu are zeroing in what appears to be a massive zone of nickel-copper-PGE mineralization at Man. Once the partners are finished with their drilling, the Toronto-based explorer will mobilize the rig to Southeast Alaska to test a high-grade gold discovery at its solely-owned Salt Chuck palladium-gold project on Prince of Wales Island.

Eureka discovery

Itochu has spent roughly US$21 million on exploration at Man since partnering with Pure Nickel on the property in 2008. This work has earned the Tokyo-based company a 30 percent interest in the project and led to the discovery of what the partners believe is a distinct and widespread layer of platinum-palladium-gold-copper-nickel mineralization across a wide swath of the central portion of the 181.5-square-mile (470 square kilometers) property that covers of the Wrangellia Terrane.

"I think both Itochu and ourselves feel that the drilling in 2012, combined with previous year's drilling, has led to the identification of a significant zone of mineralization which occurs in the same geographic position in every drill hole, so we know it has some continuity," explained Pure Nickel Senior Geologist Jon Findlay.

This zone, which has been dubbed Eureka, is a subset of the 21-mile- (33 kilometers) long Alpha mafic-ultramafic complex that stretches across the central portion of the Man property.

Eureka consists of a broad interval of disseminated sulfide mineralization that straddles the contact between gabbroic and ultramafic rocks in the northern half of the east-west trending Alpha complex.

The zone was first recognized in 2010 drill holes PNI-10-35 and PNI-10-36.

Hole 35 cut 32 meters averaging 0.169 grams per metric ton platinum-palladium-gold, 0.1 percent copper and 0.23 percent nickel.

Hole 36 cut 165.5 meters averaging 0.272 g/t platinum-palladium-gold, 0.13 percent copper and 0.28 percent nickel.

A 2012 drill hole, PNI-12-063 confirmed the continuity of the mineralization with an 80.95-meter interval averaging 0.315 g/t platinum-palladium-gold, 0.17 percent copper and 0.25 percent nickel.

Pure Nickel said that a review of past drilling on the property shows that all drill holes that intersected the Eureka zone stratigraphy have encountered disseminated sulfide mineralization with strikingly similar grades.

Historic holes that cut the Eureka zone include:

•PNI-10-29, which cut 94 meters averaging 0.15 g/t platinum-palladium-gold, 0.06 percent copper and 0.22 percent nickel;

•PNI-07-01 cut 85 meters averaging 0.224 g/t platinum-palladium-gold, 0.12 percent copper and 0.27 percent nickel;

•PNI-07-02 cut 7.9 meters averaging 0.438 g/t platinum-palladium-gold, 0.07 percent copper and 0.27 percent nickel;

•FL-003 cut 77.1 meters averaging 0.237 g/t platinum-palladium-gold, 0.14 percent copper and 0.27 percent nickel; and

•Fl-006 cut 78.3 meters averaging 0.349 g/t platinum-palladium-gold, 0.15 percent copper and 0.29 percent nickel.

This widely spaced drilling has encountered the Eureka zone along a strike length of seven kilometers (4.5 miles) in the central part of the Alpha Complex, which, for the first time, provides a solid target in which the partners can explore with delineation drilling.

"We now have a level of predictability about where the mineralization lies and so it de-risks the project a little bit, which as an executive makes me really happy," said McPherson.

Pure Nickel and Itochu have kicked off the 2013 program with delineation and confirmation drilling within the seven kilometers of Eureka zone mineralization tapped to date. This drilling is anticipated to form the basis for a maiden resource estimate for the Man project.

Pure Nickel, which believes Eureka has the potential to stretch along the length of the Alpha complex, said testing the extent of this zone is a key objective for the company.

"The Alpha complex as a whole is almost 33 kilometers in length and because of the continuity we see where we have drill intersections … we believe there is the potential to expand that zone of mineralization to the east and west, across the entire Alpha Complex," explains Findlay. "From Pure Nickel's point of view it is also important know how big this thing is."

To begin to test Eureka's ultimate size, the explorer plans to position some holes beyond the seven-kilometer area where past drilling has tapped the zone.

"The MAN project continues to hold great promise, and we look forward to working with our partner, Itochu, to unlock the potential of the property in this our sixth season of working together," said McPherson.

Salt Chuck gold

Once drilling is completed at Man, Pure Nickel plans to move the rig to its Salt Chuck property on Prince of Wales Island in Southeast Alaska, where the temperate climate favors year-round drilling.

"We are pretty excited about this project," McPherson said.

The historical Salt Chuck Mine produced some 300,000 metric tons of ore, reported by U.S. government summaries (1948) to average 0.95 percent copper, 1.96 g/t palladium, 1.12 g/t gold and 5.29 g/t silver. The mine was the largest producer of palladium in the USA during its era of production.

While its palladium potential is what inspired Pure Nickel to acquire the Salt Chuck property in 2007, the company's enthusiasm for the project was heightened by a high-grade gold discovery made in 2012.

Targeting a geophysical and geochemical anomaly that indicated a palladium deposit may be lying in wait, last year's 1,700-meter drill program instead hit nearly one-ounce-per-metric ton gold at an area known as North Pole Hill, situated at the western end of the Salt Chuck property.

"We were targeting the same type of mineralization at the mine and instead we got extremely high gold mineralization, which you don't see at the mine," Findlay said.

NPH-12-04, the gold discovery hole, cut 2.58 meters averaging 29.1 g/t gold, 14.1 g/t silver and 0.79 percent copper; and included 0.35 meters averaging 127.8 g/t gold, 57.6 g/t silver and 2.78 percent copper.

NPH-12-09, drilled 550 meters southwest of hole 4, cut 5.49 meters averaging 1.2 g/t gold.

McPherson said, "It is extremely satisfying to be able to report a new gold discovery. The styles of mineralization encountered at North Pole Hill represent exceptional targets for continued exploration."

With the area drilled in 2012 showing relatively low concentrations of gold in the overlying soil, yet yielded nearly an ounce-per-metric-ton of the precious yellow metal in the drill core, Findlay took another look at the geochemical data from Salt Chuck and identified areas that show much higher concentrations of gold in soil samples.

"There are much better gold anomalies that have never been drilled," explained the senior geologist.

This provides Pure Nickel with two gold targets to follow-up on when it returns to Salt Chuck this fall: expanding upon the high-grade gold discovered beneath a relatively weak gold anomaly; and drilling other geochemical targets with much higher concentrations of the precious metal.

Pure Nickel hopes the drilling around hole 4 will continue to tap high-grade gold, forming the basis for an initial resource in the immediate area of the discovery, while the exploration holes will begin to test a 2,000-meter trend of higher grade geochemical targets that indicates the prospect of a much bigger gold-system at Salt Chuck.

"The gold anomalies in soils form a very coherent, geologically interpretable trend. And I feel there is a real potential of a major zone of mineralization following these gold anomalies," said Findlay.

While gold has grabbed the spotlight at Salt Chuck, broad zones of anomalous palladium concentrations encountered at greater depths, continue to provide tantalizing clues to the platinum group metal the property is known for.

NPH-12-02 cut 50.1 meters averaging 138 parts-per billion (0.138 g/t) palladium, including 234 ppb (0.234 g/t) palladium over 12.85 meters.

NPH12-04 cut 43.5 meters averaging 94 ppb (0.094 g/t) palladium.

Pure Nickel says these anomalous intersections appear to reflect primary magmatic mineralization, and they raise the possibility that remobilized palladium mineralization, such as at the Salt Chuck Mine, may be associated with other structures not yet encountered in the North Pole Hill area.

Pure Nickel hypothesized that the North Pole Hill anomalies reflect the presence of the same style of remobilized magmatic copper-gold-silver-palladium mineralization found at the historic Salt Chuck mine, roughly 2,000 meters to the southeast.

These anomalies extend 1,500 meters along strike to the east and west, and a second gold in soil anomaly splays southward and continues a further 1,700 meters. Pure Nickel said the induced polarization anomalies extend to the limits of the geophysical surveys, leaving the potential mineralized structures at Salt Chuck wide open.

Author Bio

Shane Lasley, Publisher

Over his more than 16 years of covering mining and mineral exploration, Shane has become renowned for his ability to report on the sector in a way that is technically sound enough to inform industry insiders while being easy to understand by a wider audience.

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